Chapter 7 Bankruptcy – What is a Discharge?
The filing of a Chapter 7 bankruptcy is designed to result in a discharge of most of the debts you list on your Chapter 7 bankruptcy schedules. A discharge is a court order that says you do not have to repay your debts.
However, there are a number of exceptions to a discharge. For example, debts which may not be discharged in your Chapter 7 are most taxes, child support, alimony, student loans, court ordered fines and restitution, debts obtained through fraud or deception, and personal injury debts caused by driving while intoxicated or taking drugs. Your Chapter 7 discharge may be denied entirely if you destroy or conceal property; destroy, conceal, or falsify records; or make a false oath. Creditors cannot request you to pay any debts which have been discharged in your Chapter 7 bankruptcy.
A creditor can challenge a discharge of their debt by filing a Complaint to Determine Dischargeablity. If the creditor wins the lawsuit against you, the debt not be discharged.
If a creditor who was discharged in your Chapter 7 bankruptcy tries to collect from you after the discharge is granted by the bankruptcy court, you will have a claim against that creditor.
In some situations a debtor may choose to voluntarily pay back a creditor who was discharged in a Chapter 7. I have seen this happen with clients who owe money to a doctor that they really like and want to continue to see after the bankruptcy case is closed. The repayment of discharged debt must be completely voluntarily on the part of the debtor.
Typically, a debtor will receive a discharge within four months of the filing of the case. A person may receive a Chapter 7 discharge once every eight years.
In situations where a debtor has obtained a discharge by fraud, the bankruptcy court can order that the discharge be revoked.